Tag Archive: Millionaire Tax

Donald Scarinci wrote in observer.com on June 25 “Governor Phil Murphy has modeled his administration using President Kennedy’s playbook.” In his Inaugural Address Kennedy said, “So let us begin anew—remembering on both sides that civility is not a sign of…Read more

Governor Murphy yesterday said, “I’m not going to certify a budget based on gimmicks … When you build a financial house of cards year after year, and see it fall year after year, at some point you have to realize the…Read more

There are big stakes, and little time to resolve substantial budget differences between Governor Murphy and the leadership of the Legislature – Senate President Steve Sweeney and Assembly Speaker Craig Coughlin. These are the three key players who will determine the…Read more

Today’s opinion piece by friend and Philadelphia Inquirer Columnist Kevin Riordan was a bromance breakup letter with New Jersey Governor Phil Murphy. And it wasn’t Kevin, it was Phil. The article makes two arguments: 1) that Murphy is planning to…Read more

New Jersey Policy Perspective has made a number of key budget recommendations in its policy briefing ”Investing in New Jersey’s Future Will Require New Revenues.” Fortunately, support for raising new revenues, a key necessity of Governor Murphy’s initiatives, comes in a…Read more

Governor Christie in his opening press release statement trumpets his budget actions by boasting he “acts decisively to veto over $1 billion in irresponsible tax hikes and balances a fifth consecutive budget. He makes the hard and necessary choice to protect essential services for NJ families.” Well, the tax hikes were not irresponsible. They were designed to meet a contractual obligation to State employees and retirees. He has no choice but to balance the budget as it’s required by law. As a result of his huge line item vetoes and smaller legislative cuts we end up with a budget lower than he proposed, lower than the legislature’s budget and lower than last year’s budget. Christie should have an easier time to meet his revenue projections, but he has insufficient funds “to protect essential services for NJ families.” After poorly managing the economy, not meeting a union obligation, and having the legislature cut some of his priorities, it is no surprise that he “signed the budget privately in his inner office.”

In Washington Democrats and Republicans generally agree that U.S. debt, expenses and entitlements are problems that need addressing. The Republican approach is basically to cut expenses and entitlements while the Democrats seek to raise revenues.

The same dichotomy is apparent in New Jersey where Governor’s Christie’s mantra has been to reduce expenses. What we see in Washington plays out here where Christie’s cuts disadvantage the poor and the middle class, whereas the legislature seeks more tax revenue from the very wealthy. The problem in New Jersey will only grow worse as we face increased expenses to recover from Sandy. Next year’s much higher pension contribution and transportation fund costs, coupled with state revenue already way behind budget, only make the matter worse.

Yes, FEMA, insurers and foundations will help fund the recovery effort. But there will remain a substantial gap which New Jerseyans will have to bear. As with the U.S. fiscal cliff, that gap financing should not be thrust upon the poor and those who can least afford it. Christie’s inclination is to cut, but Democrats must insist on also raising more revenue.

The millionaire’s tax surcharge or even one on people’s income above $400,000 should be the line drawn in the sand by the legislature before contemplating cuts that might hurt those who are not wealthy. Forget about the 10% tax cut which Christie proposed and even the related property tax relief which the legislature proposed. Time will tell, but it may be necessary to add a property and business tax surcharge in those areas most affected, or in the state as a whole.

We must not fall over the cliff while Christie, with a view toward running as President in 2016, follows Republican dogma. President Obama and Democrats in the Congress and Senate are insisting on revenue enhancements. In New Jersey we must do no less.

In the previous diary on NJ JOBS we examined the wrong track approach which emphasizes reducing government, budgets, and debt. By putting people back to work, however, the state can regain tax revenues needed to reduce indebtedness and replenish our unemployment, transportation, and pension/health funds. More important, it brings a measure of relief, security and optimism, sorely lacking now, to people who want to hold on to their home, put food on their table, pay bills, and reduce their reliance on government support. The argument should not be, as Christie says, over jobs for the private sector vs. the public sector because both are essential to our economy and our well-being.

Our state government, famous for imposing objectives on organizations it funds, could set its own objective for lowering unemployment. A decrease of just 1%, from 9.5% to 8.5%, in the unemployment rate would add about 45,000 new jobs for those who are now struggling. At an average salary of $25,000 it would add over $1 billion to our economy, part of which would go to taxes, strengthening the state’s revenues. A substantial reduction in unemployment to 5% or 6% is a longer term objective which entails retooling education, innovation and automation for new jobs replacing those which are no longer needed and in which we are no longer competitive. A state goal of 1% or 2% is not an impossible dream.

Immediately on the heels of the Pension and Health Benefits bill comes the Battle of the 2012 Budget which must be fought and concluded by the end of next week. And the battle lines are being drawn. This year Senate President Sweeney (D- Gloucester) and Assembly Speaker Oliver (D- Essex) have proposed more robust alternatives. Their plan envisions adding more than $1 million to Governor Christie’s proposed budget.

Their plan includes:

Millionaire’s Tax – increase tax from the current 8.97% to 10.75% on income over $1 million.

Disgust toward recent Democratic leadership should not get in the way of supporting alternatives to Christie’s budget proposals. Christie brandishes the veto pen so negotiation and even support from Republican legislators will be needed for an improved outcome.